Council Post: The AI Moat Investors Should Avoid Counting Twice

Omega Venture Partners founder Gaurav Tewari argues that AI investors often misread what creates a durable “moat.” He says proprietary data advantages and network effects can look similar in pitch language, but they behave differently in competition and must be evaluated separately. A network effect makes the product more valuable as more participants join—participation itself drives value. A data or learning advantage improves performance because the system learns from user interactions, even when customers never interact with one another. Tewari points to Uber as running both mechanisms, while warning enterprise AI platforms like Palantir may have data value without a classic network effect.